By Greg Gao

(JW Insights) Mar 6 -- Shares in Chinese silicon carbide(SiC) semiconductor devices manufacturer Tony Electronic(东尼电子), a major listed SiC power components maker in China, dipped as Tesla announced to development of a new powertrain for lower-cost electric vehicles (EVs) that could use 75% less SiC power MOSFETs on March 1, JW Insights learned.

The US EV giant’s announcement sent shockwaves through China’s SiC semiconductor makers’ stock markets. As one of the emerging silicon carbide devices star companies, Tony Electronics’ stock has slumped more than 19% in the last two trading days since Tesla’s 2023 Investor Day presentation on March 1, prompting the company to respond with an announcement to assure investors.

On the evening of March 5, Tony Electronics announced abnormal fluctuations in stock trading, saying that after the company’s self-inspection, the company’s current production and operation activities are normal, and there have been no major changes in daily operations. 

Tony Electronics has announced that it has received big orders for SiC devices in the beginning of the year. Riding the wave of rising penetration of electric vehicles, the company’s share price hit a high of RMB86($12.4), and the number now slumps to RMB54($7.8) as of March 6.

Tony Semiconductor, a subsidiary of Tony Electronics, signed a procurement contract with a downstream customer on January 9, it will deliver 135,000 pieces of 6-inch SiC substrates to the customer in 2023, with a total sales amount of RMB675 million($97 million). In 2024 and 2025, the company plans to deliver 300,000 and 500,000 pieces of 6-inch SiC substrates to the customer, respectively, JW Insights learned.

Chips made with SiC transistors are widely used in electric vehicles. Generally, they withstand more heat, have a longer life, and are more energy-efficient than semiconductors made with silicon power transistors, according to media reports.

After Tesla plans to reduce the use of SiC for its next-generation EVs, various voices have appeared in the market. Some investors expressed worries that this might be a harbinger for the industry, sending shares of related chipmakers down in the short term.

However, one industry insider noted that as long as the total battery power of EVs does not drop in the future, the advantages of using SiC outweigh its cost. As the overall cost of SiC devices decreases rapidly in the future, SiC devices will still be one of the best choices for EV manufacturers.